1. Chapter 20 Environmental Law We will not cover Chapters 21 and 22. Land Development and Tax

2. Statutory Environmental Laws Air Pollution Regulation: – Air Pollution Control Act (1955) – Clean Air Act (1963) – Air Quality Act (1967/1990) Economic Controls for Non-Attainment Areas: – New plants must have greatest possible emission control – All other operations must be in compliance – New plant emissions must be offset with reduction elsewhere – Follows bubble concept. For new plant to begin operations, its pollution must be offset by reduction in the area Control in PSD areas: – Prevention of significant deterioration EPA has right to review proposed plant construction Plant has to show that there will not be significant deterioration 1990 Amendments to Clean Air Act: – Plans must use maximum achievable control technology (MACT)

3. U.S. Supreme Court Imposed requirements to address carbon emissions -- Massachusetts v. EPA, 549 U.S. 497 (2007), Required companies to obtain approval for minor, not just major, modifications - - Environmental Defense v. Duke Energy, 549 U.S. 561 (2007),

4. Water Protection Water Pollution Regulation – Rivers and Harbors Act of 1855 Prohibited discharges into navigable waters Used for enforcement since other laws had no teeth – Water Quality Act of 1965 Created Federal Water Pollution Control Administration (FWPCA) States required to establish water quality standards No enforcement procedures—states did little – Federal Water Pollution Control Act of 1972 Federal government responsible for standards and control Swimmable and fishable waters Zero discharge of pollutants – sets levels – Three categories of pollution: conventional, nonconventional and toxic – Conventional must use “best available treatment (BAT) – Toxic- - “Best technology available.” Still do cost/benefit Renamed Clean Water Act in 1977 Best available treatment for effluent release Consider 20.3, p. 561. Inland steel claims that issuing permit but requiring the permit to be modifiable for every change for technology or discovery is too restrictive. Every time a new technology became available they would have to get a new permit.

5. More Water Protection Safe Drinking Water Act – Passed in 1986 – States responsible for enforcement but must have minimum federal standards for drinking water systems Oil Pollution Act of 1990 – Passed in response to huge spills like Exxon Valdez – Companies must either clean up spill or pay federal government its costs for the clean-up – Applies to all navigable waters up to 200 miles offshore

6. Toxic and Other Waste Resource Conservation and Recovery Act of 1976 – Regulates methods of disposal through a permit system – Discourages dumping “SUPERFUND”: Comprehensive Environmental Response, Compensation, & Liability Act (CERCLA) – Suit can be brought to recover funds expended from company responsible for the dumping – 1986 amendments Superfund Amendment and Reauthorization Act – EPA can now sue to recover clean-up funds from those who are responsible – Liability for clean-up cost may extend to lenders – Under the Asset Conservation, Lenders Liability, and Deposit Insurance Protection Act of 1966, lenders are protected from liability so long as they do not participate in the management of the property Four Cases of Responsible Parties: (1) Owners and operators at the time of contamination, (2) Current owners and operators, (3) transporters of the hazardous material, and (4) those e who arranged for transport of the hazardous materials.

7. No CERCLA Lender Liability Monitoring or enforce terms of the security agreement Monitoring or inspect the premises or facility Mandating that the debtor take action on hazardous materials Providing financial advice or counseling Restructuring or renegotiate the loan terms Exercising any remedies available at law Foreclosing on the property Selling the property Leasing the property Finished here

8. Burlington Northern Railroad/Shell Oil Co v. US (#9) 129 S.Ct. 1870 (2009), p. 563 B&B Chemical Distribution Company. Superfund site of company, B&B, that bought pesticides and chemicals from Shell and resold them. Railroads Leased Land. Northern Railroad leased some land to B&B (it owned railroad land adjacent to B&B’s land). Shell Provided the Chemicals. Shell provided instructions on how to prevent and clean up spills and later required inspections. Chemicals Spilled. Often during loading and unloading chemicals were spilled. Government Sues. Is Shell an “arranger” Are parties jointly and severely liable even where reasonable basis for apportionment exists? 8 EPA Website provides information on the site. The third 5-year review was posted in 2011 – not done cleaning yet. http://yosemite.epa.gov/r9/sfund/r9sfdocw.nsf/ViewByEPAID/cad052384021?OpenDocument. http://yosemite.epa.gov/r9/sfund/r9sfdocw.nsf/ViewByEPAID/cad052384021?OpenDocument

9. Buyer Due Diligence Phase 1: Looking at private and public records Phase 2: Chemical analysis of soil, structures, and water from the property. Phase 3: Cleanup The following components of all appropriate inquiries must be conducted or updated within 180 days of and prior to the date of acquisition of the subject property: (1) Interviews with past and present owners, operators, and occupants (see §312.23); (2) Searches for recorded environmental cleanup liens (see §312.25); (3) Reviews of federal, tribal, state, and local government records (see §312.26); (4) Visual inspections of the facility and of adjoining properties (see §312.23); and (5) The declaration by the environmental professional (see §312.21(d))

10. Guidelines for Self-Audits 1. The violations were uncovered as part of a self-audit or due diligence done on property 2. The violations were uncovered voluntarily 3. The violations were reported to the EPA within 10 days 4. The violations were discovered independently and disclosed independently, not because someone else was reporting or threatening to report 5. There is correction of the violations within 60 days 6. There is a written agreement that the conduct will not recur 7. There can be no repeat violations or patterns of violations 8. There is no serious harm to anyone as a result of the violation 9. The company cooperates completely with the EPA

11. Superfund Case Consider 20.4, p. 565. Grand Auto Parts Stores sold used batteries it got for trade in to Morris Kirk & Sons, a battery-cracking plant. The battery-cracking plant was found to have environmental problems. Is Grand Auto Parts responsible?

12. Sierra Club v. United States Department of Transportation (#x) 753 F2d 120 (DC 1985) EIS Required? Does the FAA have to do an Environmental Impact Statement to approve landing of jet airplanes at Jackson Hole. 12 Airport in National Park. Jets v. Prop Planes. Although private jets have flown into the airport since the 1960s, this is the first time commercial jets would do so. The jets were larger so fewer flights were necessary and were the same or only slightly louder. EIS Done in 1980. Based on this EIS airlines given permission to fly into the airport for two years. Airlines Desire to Continue To Fly Jets Post 1982. Another EIS Required? New Plane =737 Old Plane = C-580 End-of-Chapter, Q2, p. 587. EIS required for change in flight path at airport?

13. Babbitt v. Sweet Home Chapter of Communities for a Great Oregon (#10) 515 US 687 (1995) Northern spotted owl case. “The term “take” means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.’ How is “Harm” defined within the definition of “take” 13

14. Bennett v. Spear (#11) 520 US 154 (1997) Standing Case and Endangered Species Act. Who has standing to sue in environmental cases. Fish and Wildlife Service Opinion. The opinion stated concluded that minimum water levels should be maintained in certain portions of the project to protect two endangered first – the Lost River Sucker and the Shortnose Sucker. Rancher Sued. A rancher sued claiming the opinion was wrong and that reducing water flow to ranchers would cause economic harm that outweighs the benefits of maintaining water levels. The Law. “any person may commence a civil suit” – meant to give “private attorney general” status. Can a person that wants to prevent the opinion sue? 14 Gerber Dam – part of Klamath Project

15. U.S. v. Agosta- Vega 617 F3d 541 (1 st Cir 2010) Raw Sewage Dumped in Creek. Agosto, a developer, developed a community that had problems with its septic system. The system backed up causing sewage to come up in yards and in homes. Agosta pumped the sewage into a truck and then dumped into into drains or into the creek. He Did Not Know. He said he did not know what was happening. Provided 3,000 Gallon Tanker Truck. “somehow sewage evaporated inside the truck.” Issue: Is Circumstantial Evidence Enough to Convict? 15

16. Environmental Cases – Common Law Nuisance 16 End-of-Chapter, Q6, p. 581. Junk collected on property for worm farming a nuisance?

17. Environmental Cases 17 Consider 20.5, p. 578. Backhoe operator hit oil pipe causing between 1,000-5,000 gallon of oil to spill in river. Should the off-duty supervisor go to jail? End-of-Chapter, Q1, p. 580. Should factoring company have to pay for environmental damage caused by company from which it purchased receivables?

18. Brownfield Issues Many CERCLA sites that are abandoned and/or unused Fear of liability precludes development and use Cost of cleanup is prohibitive for projects Federal, state, and local programs to encourage redevelopment Process to purchase as a “innocent landowner”

19. Environmental Quality Environmental Quality Regulation – National Environmental Policy Act of 1969 Requires federal agencies to file environmental impact statements for all major actions (EISs) – Content of EIS: Environmental impact Adverse effects Alternatives New effects - short term versus long term Irreversible effects

20. Other Environmental Laws Noise Control Act of 1972. EPA and FAA regulate noise pollution for Aircraft Surface Mining and Reclamation Act of 1977 requires mining company to restore land Pesticide Control Act – Must register with EPA to ship – Must label all pesticides Occupational Safety and Health Administration – Responsible for work place environment and safety issues Asbestos Hazard Emergency Response Act (AHERA) – Schools must inspect for asbestos and take action – Asbestos is a toxic pollutant and community right-to-know substance – Duty to disclose presence of asbestos Endangered Species Act – Powerful tool for environmentalists – Habitats cannot be disturbed

21. State Environmental Laws State EPA: – Regulation of fuel used – Incentives for carpooling

22. Enforcement of Environmental Laws: Who? EPA OSHA State EPAs Private citizens Nuisance actions Forest Service Bureau of Land Management Atomic Energy Commission Department of the Interior HUD Department of Commerce Federal Power Commission

23. Enforcement Parties: – Environmental Protection Agency—EPA – Council on Environmental Quality—CEQ Part of executive branch Sets national policies and makes recommendations Other agencies Atomic Energy Commission Federal Power Commission HUD Department of Interior Forest Service Bureau of Land Management Department of Commerce Criminal Sanctions: – Clean Air Act $25,000 per day, up to one year in prison, or both 15 years for willful or repeat violations $10,000 rewards for reporting violations – Clean Water Act: $25,000 per day, up to one year in prison, or both; $100,000 for intentional acts – Resource Conservation and Recovery Act $250,000 and/or fifteen years for intentional

24. Enforcement of Environmental Laws: How? Injunctions Penalties: civil and criminal Imprisonment: for individuals and corporate officers Civil suits Consent decrees Nuisance actions (public and private)